The UK economy is expanding after the lift in restrictions on 19 July. Since then, the FTSE 100 index has gone up 5.5%. After looking at the half-yearly financials released this month, these are the two FTSE 100 shares I’d buy with £1,000 today.
Supermarket giant
Sainsbury (LSE: SBRY) has been on an extraordinary run in the market. In the last 12 months, its share price has risen 58.4% and is currently trading at 303p.
The second-biggest supermarket chain in the UK (in terms of market share) exceeded sales and revenue expectations in the first quarter (Q1) of 2021. Sales of general merchandise across Sainsbury supermarkets were up 11.2% and 3.2% in Argos outlets. Clothing sales were up 57.6% in Q1 2021.
The supermarket chain recorded an impressive 29% increase in online groceries sales and a two-year growth of 142%. To me, this shows foresight and adaptability and has allowed the company to thrive in a time when e-commerce reigns supreme.
Major concerns in the supermarket sector are razor-thin margins, tough competition from the likes of Tesco and Morrisons, and the expected drop in sales with normalising buying patterns.
To counter this, Sainsbury reinvested £50m for targeted price reductions on everyday essentials and food staples. The underlying profit for 2022 is expected to be at least £660m despite the expected drop in grocery purchases as restaurants across the country reopen at full capacity.
Sainsbury also shows good customer retention figures. It ranks highest in the customer satisfaction index ahead of competitors in both supermarkets and online stores.
Since 2021, share prices have risen 34.1% and I expect these figures to continue. Impressive investor returns, stable financials, and large market share earns Sainsbury a spot on my list of FTSE 100 shares to buy with £1,000.
Sports fashion retailer
JD Sports Fashion (LSE: JD) is a company that looks very promising to me at the moment. The retailer is growing at a CAGR (compound annual growth rate) of 37% and recent financials have been encouraging. The company was on my list of stocks to buy in July and has continued this impressive run since.
The FTSE 100 clothing and sports retailer has exceeded expectations in a time when retail-centric businesses have taken a major hit. Total revenue remained stable at £6.16bn in 2021. Though pre-tax profits went down 7% to £324m, it managed to grow net assets by 13.8% to £1.49bn and net cash by 85% to £795m.
The US market accounts for 28% of total sales. The company has continued its expansion efforts in the region, signing multimillion-dollar deals with DLTR Villa and Shoe Palace, amassing over 500 retail locations. This push will help the company grow in the highly clustered but profitable region.
JD Sports has 2,600 stores globally and recently signed a deal with Clipper Logistics to aid its thriving online retail operations. This omnichannel approach shows me that the company can remain a global force in sports fashion retail.
Despite competition from global giants like Adidas and Nike, I expect this good market run to continue. Over the past 12 months, JD Sports shares have risen 40.4% and are showing no signs of slowing down, which is why JD Sports is on my list of FTSE 100 shares to buy with £1,000 today.